more years of her life to engage in remunerative activities that may help toward increasing family investments in each child's schooling and training.
Shifts in Labor Supply and Demand
A third factor contributing to the change in parent demand for children is the change in the relative scarcity of unskilled labor, skilled labor, and physical capital. From the demand side it appears that modern industrialization calls for an increasing supply of skilled labor that has not been satisfied at past relative wages. Despite the enormous expansion of educational facilities in most low income countries, differences in earnings between individuals with and without primary and secondary educations continue to widen. Although the costs of education certainly have also risen, there are some indications that the pecuniary returns to education have grown with the expansion of the modern sector and the diffusion of new technology. An obvious source of this widening disparity in the earnings of unskilled and skilled labor is the "population explosion" itself, which has caused the supply of labor to increase in the 1960's a third to a half faster than it did in the 1950's.*
With development, the share of national income received by labor has also shown a tendency to rise in comparison with the shares of land or physical capital. In low income countries, labor's share of manufacturing value-added is one half or less, whereas in high income countries the labor share is more like three fourths.t Similar differences probably exist in all economic activity, but the gaps in agricultural data hinder comparisons. In an extreme case of a "labor surplus" economy, Hansen has found that the Egyptian agricultural wage has risen in this century relative to the returns on land, despite the several-fold increase in labor on the nearly fixed physical stock of land. The factor share of land in Egyptian agriculture has secularly fallen, while the share of fertilizers and pesticides has risen, with labor's share virtually unchanged.? Comparable evidence is hard to come by for a large number of low income countries, but what information we have suggests that labor's share of income rises with the structure of growth occurring today. Within labor's growing share, evidence indicates a widening dispersion in personal incomes, as the modern sector rewards scarce skills handsomely and the traditional
*Kuzncts (31), Wciskoff, (32) and Nelson (33) survey data on these developments, though time series arc deficient and have many shortcomings. Theoretical and empirical investigations of the complementaries between education and capital formation applied to the United States have been recently investigated in two papers by Griliches (34, 35).
tSee (33, Chapters IV, V).
•'"See (36, 37). There was some increase in the land brought under cultivation in Egypt during the 1920's and 1930's, and much of the Nile Valley has been shifted to double cropping during this century. The Hansen findings apply only to wage labor, not to family labor. Of course, while the physical stock of land is fixed, land as a unit of production with defined characteristics is not fixed; fertilizer, multiple cropping, etc. can change it.